Challenges to Traditional Fiduciary Duties of Multinational Company Boards Under the Hardening of ESG Regulations

Abstract

Environmental, Social, and Governance (ESG) principles have evolved from voluntary initiatives into legally enforceable norms. This paper examines how the trend reshapes fiduciary duties within multinational corporate boards, analyzes the resulting conflicts and dilemmas, and proposes adaptive governance pathways. Employing comparative law and case analysis, the study integrates recent legislation and practices from the European Union, the United States, and China. The study finds that the hardening of ESG regulations subjects directors to multiple challenges, including conflicting objectives, ambiguous liabilities, and cross-border compliance. This paper also recommends reconstructing the essence of fiduciary duties, innovating safe harbor and liability exemption mechanisms, and strengthening international rule coordination to establish a resilient and internationally compatible corporate governance framework.